Lower petrol prices in the United States has reduced demand so Ford is reducing output of compact and compact hybrid model by cutting a shift and laying off 700 workers.
Ford spokeswoman Kristina Adamski the assembly plant in Wayne, Michigan is cutting a shift and will run on two shifts from 22 June.
Go deeper with GlobalData
The factory makes three versions of the Focus compact car plus the C-Max compact hybrid and C-Max plug-in hybrid. Sales of hybrid and petrol-powered small cars have taken a hit in recent months as tumbling crude oil prices sent fuel prices lower, the news agency noted.
Focus US sales in March were down 14.5% and, for the first three months of the year, sales of about 53,000 units were up only 2% compared with last year’s first quarter. C-Max US sales of about 4,300 to the end of March were down 23% from last year’s first quarter.
Ford said it would offer summer replacement jobs to some of the Michigan Assembly workers and work to find all of them full time employment at the company’s plants. Ford said it has “high confidence” it can find new jobs for all laid off workers within a year.
The layoffs will affect 675 hourly and 25 salaried workers. The hourly workers are represented by the United Auto Workers union and are paid the so-called ‘second-tier’ wage that is less than longtime hourly workers.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataSecond tier workers make between US$15.78 to $19.28 per hour, while veteran Ford workers make $28.50 per hour, Reuters said.
In an emailed statement, UAW-Ford vice-president Jimmy Settles said: “While [the] announcement of a shift reduction at our Michigan Assembly Plant is unfortunate, it is not completely unexpected.
“We are reminded from time to time that our industry is cyclical and volatile to market conditions. Fortunately, through collective bargaining we have been able to negotiate provisions throughout the years that allow protections for our members adversely affected by production reductions.
“It is expected that nearly all of the displaced members will return to active employment at other southeast Michigan locations. Some, as soon as this summer, and all by early 2016. The UAW has a successful history of negotiating layoff, transfer and job security provisions that have protected tens of thousands of workers in our history.”
